Former Selfridges Tycoon Sentenced to Two Years in Prison for Fraud

Former Selfridges owner Rene Benko has been sentenced to two years in prison after the fallen Austrian property tycoon was found guilty of insolvency fraud.

After a two-day trial in an Innsbruck court, the 48-year-old was found guilty of a charge relating to €300,000 (£261,000) that he gave his mother in 2023.

Prosecutors alleged he had shifted this sum just before filing for insolvency to shield it from creditors in what would become Europe’s biggest bankruptcy since the 2008-09 financial crisis.

Mr Benko still faces more than a dozen further charges amid the unravelling of a byzantine $27bn (£20bn) property empire that also included the Chrysler Building in New York and a palazzo hotel on Venice’s Grand Canal.

His creditors reportedly include billionaire families, sovereign wealth funds from Asia and the Gulf and banks including private Swiss financier Julius Baer.

Mr Benko had pleaded not guilty and was acquitted on a similar second charge involving an advance transfer of €360,000 to a company he indirectly controlled. His lawyers were contacted for comment.

The verdict on both charges is not yet final, the court said after sentencing. Mr Benko has been in custody in Vienna’s 19th-century Josefstadt prison since January and is also under investigation in Germany and Italy.

His elaborately structured corporate empire, Signa, came unstuck amid rising interest rates and sagging property prices in 2023, ending a decade-long, worldwide real estate spree.

After dropping out of high school at 17, Mr Benko became one of Austria’s richest and best connected entrepreneurs. Forbes valued his personal fortune at €6bn. His trappings reportedly included a Tyrolean hunting estate, two private jets, a €30m luxury yacht and an €11m Picasso painting.

Mr Benko started out by converting attics into luxury penthouse lofts and built up a substantial Austrian property portfolio in the early 2000s, expanding into shopping centres and media ownership in the 2010s.

After a bribery scandal in 2012-13, he stepped back from formally running Signa – but from his position as chairman of an advisory board, he masterminded Signa’s expansion behind the scenes.

Setting his sights ever higher, he and a partner bought New York’s Chrysler Building – a landmark 1920s Art Deco tower – in 2019 and then acquired the Hotel Bauer Palazzo in Venice a year later.

The £4bn Selfridges purchase in 2021 was a joint venture with Thailand’s Central Group. Mr Benko sold his 40pc stake to the Saudi sovereign wealth fund when Signa ran aground two years later.

Signa’s complex web of intra-group transactions, inflated asset valuations and elaborate financial structures left it vulnerable to rising borrowing costs and falling property prices. Mr Benko began struggling to meet debt payments and an asset sell-off began.

Creditors are seeking billions and prosecutors are filing further charges. 

According to a court filing reported by Bloomberg, Mr Benko is also accused of getting his in-laws to install a safe in their home where 11 luxury watches worth €250,000 were stashed away.

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Credit: www.telegraph.co.uk